Global rise in emissions arrested in 2019

March 3rd 2020 | Multiple countries | Coal

Global CO2 emissions flat-lined in 2019 following two years of successive increases, according to estimates released in February by the International Energy Agency (IEA). This was achieved despite an over 2% increase in global GDP. The rate of growth in annual CO2 energy-related emissions in the last six years has slowed by two-thirds to 0.6% in 2013-19, compared with 1.8% in 2007-13. This suggests a weakening correlation between GDP and emissions growth, which is a positive sign.

However, recent progress in emissions reduction is heavily skewed towards high-income countries, where coal in the power sector has been displaced by renewables and gas. Meanwhile, emissions in the rest of the world are still increasing, as are emissions from oil and gas use. Global emissions growth might be slowing to a walk, but substantive emissions reduction needs to be seen in areas other than the power sector in high-income countries.

Advanced economies stifle emissions growth

According to the IEA, global CO2 energy-related emissions remained at 33.3 gigatonnes (Gt) in 2019, unchanged from 2018. This followed an increase in 2017-18 and a period of no change between 2014 and 2016. The IEA attributed the arrest in emissions growth to a continued collapse of coal use for electricity in the US, where coal generation fell by 15%, and in the EU, where it fell by 25% (mainly in Western Europe). The displacement of coal by renewables and gas in 2019 helped drive US emissions down by 2.9%, and EU emissions by 5%, the IEA says.

Nuclear restarts in Japan also drove down power generation from fossil fuels, including coal, leading to a 4% dip in emissions in the country. Overall, emissions in advanced economies fell by 3.2%, largely derived from a decline in the power sector. At 370m tonnes, the fall in emissions from the US, EU and Japan was in 2019 significant enough to negate the increase in emissions from the rest of the world.

A range of policy and market factors in advanced economies have made both natural gas and renewables competitive with coal. In the US natural gas remains cheap due to higher domestic output, and solar and wind capacity has continued to build, despite fears that the Trump administration would knock confidence out of the renewables sector. In Europe, reforms to the EU's emissions trading scheme has led to higher carbon prices, which has benefitted gas, while policy support for renewables, and more recently national-level coal phase-out plans, have driven solar and wind capacity increases. In 2019 EU power generation from wind and solar exceeded that from coal for the first time. Coal has fallen to just 15% of power generation in the EU, and 24% in the US.

Emissions still increasing in industrialising economies

The IEA stated that "emissions grew strongly in Southeast Asia, lifted by robust coal demand," reflecting that not all regions are moving away from coal-fired power. As such, the retreat of coal from the power sector in most advanced economies cannot be relied on indefinitely to arrest global emissions growth. Eventually, reductions in coal use will need to occur elsewhere if emissions reductions are to be achieved globally, but this transition will be more difficult in industrialising economies that are coal dependent.

Emissions from outside advanced economies still increased by 1.9% in 2019, and would have risen higher without the impact of one-off factors in India, now the fourth-largest emitting economy. The IEA stated that India's emissions growth was "moderate" last year, partly owing to higher-than-usual rainfall boosting hydropower at the expense of coal, and weaker GDP growth depressing energy demand. Coal generation in India is being crimped by renewables deployment, but last year coal use in India's power sector fell partly owing to weather-related factors, and this is unlikely to become the norm in the short to medium term. India's GDP is expected to rebound, which could lead to emissions returning to stronger growth.

Slower economic growth, along with higher output from low-carbon electricity sources, also helped temper China's emissions growth in 2019, according to the IEA. No figure on China's emissions growth was given, but GDP growth did slow in China last year to 6.1% in 2019 from 6.6% in 2018, according to EIU estimates. Official Chinese statistics also reported lower electricity consumption growth in 2019 (3.5%) compared to the year before (6.8%), much of which was absorbed by higher renewables and nuclear output rather than by coal.

China's economic growth has been becoming less carbon intensive (average annual growth of China's emissions slowed to 0.4% between 2013 and 2018, compared with 4.6% between 2009 and 2014). China's emissions growth is losing momentum, and this has been influential in slowing global emissions growth, but its trajectory is still difficult to predict. For example, China's emissions stayed flat between 2014 and 2016, raising hopes that a peak had been reached, but instead has increased annually since then (albeit modestly). A peak in China's emissions will be key to a peak being reached in global emissions, but to date this has not yet occurred.

Looking beyond coal to reduce emissions

The narrative on emissions reduction often focusses on reducing the use of coal in the power sector, but there are other factors to consider. The IEA stated that while total coal emissions fell last year, emissions from oil and gas increased. There are readily available low-carbon alternatives to coal in the power sector that can lead to reductions in emissions relatively quickly. Indeed countries that have made the most progress recently in cutting emissions, such as the UK, have been able to do so by rapidly cutting down coal use for power. But advances in de-carbonisation of other sectors of the global economy, such as industry and transport, have been incremental at best, while use of energy efficiency need to be accelerated.

Reductions in annual emissions globally will require more rapid progress in all sectors of the economy, some of which will involve expanding the use of electricification to reduce emissions from oil and gas use. Some technologies, such as electric vehicles, might be on the cusp of making an impact on fossil fuel demand in the transport sector, but others, such as renewables-based hydrogen, are further away from being deployed at scale.

Conclusion

Global annual CO2 emissions in 2019 remained flat for the fourth time in six years, reflecting a slowdown in growth of energy-related CO2 output. This is a sign that GDP growth is becoming less carbon intensive, although the global economy is not on track to realise the Paris Climate Agreement's goal of limiting the global average temperature to less than 2 degrees Celsius. The flat-lining in emissions growth was largely due to switching from coal in the power sector of rich economies, helped to a smaller extent by one-off factors in India and China. Global emissions growth seems to be weakening, but a peak, and then a sustained fall, will require cuts in all sectors and regions of the global economy. For this to occur, advanced economies will need to support industrialising ones to adopt a less carbon intensive pathway to economic development. They will also have to replicate the success in cutting emissions from power generation in other sectors of their own economies.